Ofcom wants customers to be able to take advantage of choice in broadband, phone and TV, and get the best deals for their needs. This could be by switching provider or agreeing a new deal with their existing one.

To help people do this, we are requiring broadband, TV, mobile and home phone companies to send their customers the information they need about their contract, when they need it, so they can choose the best package for them.[2] These protections are the latest in Ofcom’s Fairness for customers programme.

20 million could benefit

Our research shows that more than 20 million customers have passed their initial contract period. Many of these could be paying more than they need to.

People who bundle their landline and broadband services together pay, on average, around 20% more when they are ‘out of contract’. This rises to 26% among customers who bundle their pay TV with these two services.

Around one in seven customers (14%) don’t know whether they are still tied to their original deal; and around one in eight (12%) believe they are ‘in contract’, but don’t know when this period ends.

New alerts for customers

Therefore, Ofcom has stepped in to ensure fairness for customers, by forcing telecoms and pay TV companies to warn customers between 10 and 40 days before their contract comes to an end. These alerts will be sent by text, email or letter.[3] They will include:

the contract end date;

the price paid before this date;

any changes to the service and price paid at the end of this period;

information about any notice period required to terminate the contract; and

the best deals offered by their provider, including telling loyal customers what prices are available to new customers.

People who choose to stay with their provider without signing up to a new contract will be sent a reminder every year about their firm’s best deals.

Lindsey Fussell, Ofcom’s Consumer Group Director, said: “We’re making sure customers are treated fairly, by making companies give them the information they need, when they need it.

“This will put power in the hands of millions of people who’re paying more than necessary when they’re no longer tied to a contract.”

The changes will involve providers sending personalised and tailored information to millions of individual customers. To make sure they get this right, companies will have nine months to make the necessary changes to their systems and processes. Customers will start receiving the notifications from 15 February next year.

NOTES TO EDITORS

1. Generally, where we talk about a ‘contract’ – for example, the ‘initial contract period’, or being ‘out of contract’ or ‘in contract’ – this refers to a customer’s fixed commitment period. That is, the period of time over which a customer cannot cancel their services or switch to a different provider without paying a cancellation charge.

2. Business customers will also receive ‘end-of-contract’ notifications and best tariff information annually in a form suitable for them.

3. Here is an example of an end-of-contract notification sent by text message: